The FCA has published Primary Market Bulletin No. 40 launching its new technical note, Primary Market/TN 619.1, which adapts the Guidelines on disclosure requirements under the Prospectus Regulation published by the European Securities and Markets Authority (ESMA Guidelines) for use in the UK post-Brexit. The new technical note, effective from May 2022, includes the guidance on specialist issuers set out in the older CESR Prospectus Directive Recommendations (CESR Recommendations). The FCA has also incorporated some of ESMA's Q&As on the form and content of the prospectuses into its other guidance notes.

Background

Prior to Brexit, the FCA participated in drawing up the ESMA Guidelines, designed to replace the CESR Recommendations. However, as the ESMA Guidelines did not become effective before the end of the Brexit transition period on 31 December 2020, they did not automatically become part of UK law on that date. Instead, the FCA directed issuers to continue to follow the previous ESMA Update to the CESR Recommendations for an interim period until it was able to incorporate the ESMA Guidelines into its own guidance (see our corporate update 2020/21). After a consultation in 2021, the FCA has now published technical note Primary Market/TN 619.1 to replace the previous EU guidance.

FCA's departure from the ESMA Guidelines

Primary Market/TN 619.1 replicates the ESMA Guidelines with two minor modifications:

  • pro forma financial information – it does not include ESMA's additional pro forma financial information requirements where an issuer undertakes several transactions which, when amalgamated, could qualify as significant. Instead, the FCA will continue its current approach and will not (generally) require pro forma financial information in this scenario; and
  • working capital for closed-ended investment funds – it includes additional guidance to allow closed-ended investment funds to continue to rely on minimum net proceeds to calculate working capital (in line with current UK market practice).

Further changes to the FCA's Knowledge Base

The FCA has also made the following consequential and additional changes to its Knowledge Base as a result of publishing its own guidance on prospectuses to replace previous EU guidance:

a further three new technical notes –

  1. Order of information in the prospectus – Primary Market/TN/636.1
  2. Global Depositary Receipts (GDRs) – Primary Market/TN/607.1
  3. Level of disclosure for securities subject to conversion or write-down powers – Primary Market/TN/637.1

and updates to the following procedural note and technical notes –

  1. Public offer prospectus – drafting and approval – Primary Market/PN/904.4
  2. Working capital statement – basis of preparation – Primary Market/TN/320.2
  3. Working capital statements and risk factors – Primary Market/TN/321.2
  4. Profit forecasts and estimates – Primary Market/TN/340.3
  5. Public offers – Primary Market/TN/601.3
  6. Exemptions from the requirement to produce a prospectus – Primary Market/TN/602.4
  7. Prospectus Regulation advertisement regime – Primary Market/TN/604.2
  8. Supplementary prospectuses – Primary Market/TN/605.4
  9. Documents available for inspection – Primary Market/TN/623.2
  10. Prospectus content – financial information – Primary Market/TN/627.2
  11. Pro forma financial information – Primary Market/TN/633.2

Further details of the changes are described in Primary Market Bulletin No. 40.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.